Evaluation of the Norwegian Investment Fund for Developing Countries (Norfund)

Ministry of Foreign Affairs Evaluation Report 1/2003 Evaluation of the Norwegian Investment Fund for Developing Countries (Norfund) Information from the Royal Norwegian Ministry of Foreign Affairs The Ministry’s Information Section provides information with regard to current foreign policy, trade policy, and development cooperation policy. Material can be ordered from fax no. + 47 22 24 27 87 Foreign Ministry switchboard Tel. + 47 22 24 36 00 Fax + 47 22 24 95 80 or + 47 22 24 95 81 Information is available on the Internet at http://odin.dep.no/ud Information to the media: The Ministry’s Press Spokesperson and the Senior Information Officer on Development Cooperation can be contacted through the Foreign Ministry switchboard Foreign journalists: The Norway International Press Centre, NIPS, is the Foreign Ministry’ service centre for foreign journalists in Norway, tel. + 47 22 83 83 10 In countries outside of Norway, information on the Ministry of Foreign Affairs may be obtained from Norwegian embassies or consulates Published by the Royal Norwegian Ministry of Foreign Affairs April 2003 Printed by Hatlehols AS, Brattvaag 030654-04 Circulation: 1200 E-752 E ISBN 82-7177-712-2 Evaluation of the Norwegian Investment Fund for Developing Countries (Norfund) A report prepared by Fafo, Institute for Labour and Social Research and Nordic Consulting Group Bjørne Grimsrud (team leader) Jens Claussen Stein Hansen Torunn Kvinge Responsibility for the contents and presentation of findings and recommendations rests with the evaluation team. The views and opinions expressed in the report do not necessarily correspond with those of the Ministry of Foreign Affairs. 3 Tableof Contents Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Fact Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2 Capital, Technology and Know-how Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2.1 Capital, a bottleneck for development? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2.2 Foreign direct investment impacts on domestic industry. . . . . . . . . . . . . . . . . . . . . . . . . 14 2.3. Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 2.4 Development Finance Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 3 Description and Assessment of Norfund’s Operations . . . . . . . . . . . . . . . . . . . . 19 3.1 Risk profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 3.2 Making capital available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.3 Investments in Least Developed Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.4. Development impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 3.5. Environmental, social and ethical standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 3.6. Organisational efficiency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 4.1. Relevance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 4.2. Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 4.3. Development effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 4.4. Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Appendix I Appendix II Terms of Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Persons Met . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Appendix III References and Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 List of Figures Figure 2.1 Figure 3.1 Figure 3.2 Figure 3.3 Figure 3.4 Types and product range of some Development Finance Institutions . . . . . . . . . 18 Funds invested as of December 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Norfund’s area of investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Investments and planned investments in LDCs . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Aureos African exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 List of Boxes Box 2.1 Box 3.1 Box 3.2 Box 3.3 Risk and required rate of return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 The Minco fund in Mozambique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Example of currency risk mitigating instrument. . . . . . . . . . . . . . . . . . . . . . . . . . 26 Swedfund exit study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 ... - tailieumienphi.vn